The shaky economic recovery has failed to lead to an improvement in labour markets, the head of the United Nations International Labour Organization (ILO) warned today, citing investment in infrastructure and support for small businesses as vital steps towards kick-starting global job growth

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“The global economy is not yet on a path to strong sustainable and balanced growth,” ILO Director-General Guy Ryder said in a statement to the 2014 spring meetings of the International Monetary Fund (IMF) and World Bank, where he stressed that the massive jobs gap that opened at the height of the financial crisis is showing no signs of shrinking.

“In fact, the gap will widen unless the global economy steps up the pace of growth to generate the jobs needed,” he said, explaining that weak global demand is holding back job creation, wages and recovery even further and one consequence is a slowing of the pace of poverty reduction in the developing world.

Mr. Ryder pointed out that if pre-crisis trends in employment growth had continued, 62 million more women and men would have been working in 2013 when global unemployment reached 202 million. “Unless growth picks up, the jobs gap will widen to 75 million by 2018,” he added.

According to ILO, last year the number of workers in extreme poverty declined by only 2.7 per cent globally, one of the lowest rates of reduction ever seen over the past decade.

Mr. Ryder noted that income inequalities have also widened and the wage share in gross domestic product (GDP) has fallen in many countries, including the world’s largest economies where wages have lagged behind growth in productivity for over 20 years.

“This trend was masked by unfettered household borrowing before the crisis and temporarily offset by financial market innovations that proved to be unsustainable,” he said, and such long-term structural problems now weigh heavily on demand and slow down recovery.

“The global economy must create many more jobs,” Mr. Ryder declared, emphasizing investment in infrastructure, support to small enterprises and boosting skills development, and restoring household purchasing power, particularly at the lowest income levels, as essential to avoid falling into a low-growth trap.

While welcoming the G20 Finance Ministers’ aim to lift GDP by 2 per cent or more over five years, he nevertheless called for an integrated strategy for both the demand and supply side of labour markets that would lift growth and create the jobs needed for a full and sustainable recovery.

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Employment is not expanding sufficiently fast to keep up with the growing labour force, the United Nations labour agency today reported, calling for job-friendly macroeconomic policies and a greater attention to labour market and social policies.